Can Board Rescind a Two Year Old ARC Approval?

Two years ago, HO applied for and received from the Architectural Review Committee (i) written approval to build a chicken coop; and, (ii) a written waiver of the HOA's poultry restriction. In reliance on the ARC's approval to build a coop and the ARC's waiver of the HOA's poultry restriction, the HO built a coop and now keeps chickens.

Approximately two years after the HO acted on the ARC's approval and waiver, the HOA Board sent a letter to the HO that acknowledged the ARC had granted (i) approval to have a chicken coop; and, (ii) acknowledged the ARC granted approval on an exception to the use restrictions with a waiver of the poultry restriction. The letter noted that the ARC did not follow the standard practice of submitting the forms to the HOA management company. The letter noted that neither the HOA Board nor the HOA management company received copies of the forms and formal approvals until after a neighborhood vote that occurred more than one year after the ARC approval and waiver. The letter stated that the Board would like to resolve this issue without the cost and time of further action and further stated that if the issue is not resolved by a certain date, the HOA may take legal action.

Note 1: The neighborhood vote did not change the CC&Rs nor did it amend the By Laws.
Note 2: The CC&Rs are largely silent on property use restrictions.
Note 3: Separate and apart from the Declaration of CC&Rs, Use Restrictions are imposed on the property.
Note 4: The same document that imposes the Use Restrictions also:
Note 4a: Creates the Architectural Review Committee (ARC);
Note 4b: States that the ARC must approve in writing any and all improvements to any lot prior to the commencement of construction;
Note 4c: States that if the plans are approved by the ARC, one complete set of plans will be retained by the ARC and the other set will be marked "approved" and returned to the HO; and,
Note 4d: States that the ARC has the authority to approve, in writing, exceptions to the Use Restrictions.
Note 5: The HO is in compliance with city code pertaining to poultry.

In a discussion with the Board, the HO was told that the Board believes the ARC acted wrongly and the Board wants to 'undo' the wrong. Given that the ARC has authority to grant and given that the HO properly obtained a written approval and waiver, does the Board have any standing? What are the possible repercussions of the HO ignoring the Board's letter? What are the possible repercussions of the Board pursuing a legal action?

We had an HO apply for and receive permission for a concrete patio. That became a huge disagreement about a side yard patio with a neighbor. We had many months of vicious meeting about it and in the end the board approached the homeowner and said they weren't sure they should have approved it. The HO was upset about how much this had split the community and the HOA offered to remove it since they had been the ones to approve it. HO was made whole and neighbors got along after that.

"HO was made whole and neighbors got along after that."

In this case, the HO fears that the HOA will harbor ill-will regardless of the outcome ... ill-will for being the recipient of HOA maintenance funds in the 'make whole process' or ill-will for causing the HOA to expend legal in the first place.

Does the Board not have the obligation to stand up for the HO who properly received approval prior to construction and who properly received the waiver prior to keeping the poultry?

-- I do not think a court would find in favor of the HOA.

-- I advise the homeowner to write the Board by certified mail; state that he or she properly received the ARC's and so HOA's approval; state that he or she has expended considerable money on the chickens and coop; and state that he or she will continue to maintain the chickens and coop.

-- If I were the homeowner, and did not have a lot of money to spend, I would not hire an attorney until the Board took me to court. If I had money to spare, before then, I might hire an attorney just to get the HOA off my back.

-- If the homeowner wants to minimize ill feelings, and is willing to compromise, then talks can begin. One compromise might be that the homeowner will not replace chickens that die, and that after all the chickens have gone, the HOA will pay for the removal of the coop and $_____ for giving up the partial loss of enjoyment of his or her home.

I am sorry for the nightmare the homeowner is going through. It is way more common than the average joe or jane thinks.

Simon,

I know of an HOA in VA that argued an approval didn't conform with the aesthetics of the development. They won in court.

That said, the fact that your governing documents grant the Committee to waive covenants would be a big hole in the Associations argument. They even sent a letter that the Committee approved everything, hence they acknowledge the approval. The fact that the Committee failed to follow internal procedures for informing the MC/Board is not relevant (in my eyes).

That said, if the Board isn't listening or is choosing to make an example, this issue will head for the courts and anytime you are in court it is 50/50.

Ben,

I agree. Before learning of that Association, I would have said there was no way in H___ that an Association would win trying to rescind a properly approved request.

However, the question was on what grounds might the Association have a case.
Therefore, I provided the argument used by that Association.

"I don't think the board has any authority to rescind ARC approval unless your CC&Rs give them that authority. However, unless your CC&Rs give the ARC authority to allow a variance, if the approval is granted for something that violates the CC&R, it would be invalid."

There is nothing in the CC&Rs that give them the authority to rescind the ARC approval. Rather, the Amendment to the By Laws and the Use Restrictions state that the ARC must approve in writing any and all improvements to any Lot prior to the commencement of construction of such improvements. Additionally, the ARC may, among other things, interpret Use Restrictions, and approve, in writing, exceptions to the rules.

Inasmuch as the each member of the ARC not only granted written approval for the improvement (coop) prior to the HO's commencement of construction but also that each member of the ARC signed a letter specifically granted a "waiver of the poultry restriction", isn't such approval and exception binding on the HOA? Else, what would be the ARC's raison d'être?

John,

"I say an ARC is appointed by and serves at the pleasure of the BOD." The Amendment to the Bylaws states that the members of the ARC shall be elected at the annual meeting of the members to a term of two years or until his or her death, resignation or removal by the BOD.

"I also say a BOD can override an ARC decision." That would make total sense prior to commencement of construction, partial sense subsequent to commencement of construction, and little sense after completion of construction.

"That said, overriding a decision two years later is unacceptable and I would legally challenge it." The HO would concur.

Yes the should.

However, human factors can influence the effectiveness of those merits.

See:

Influences on Judicial Decision - Making in Federal and Bankruptcy Courts

Extraneous factors in judicial decisions

What factors influence court decisions?

I agree the ARC approval would be binding based on the fact you said there is an amendment to the restrictions giving them authority to make exceptions. Even if the ARC didn't explicitly have the authority to make exceptions, I doubt many judges would rule in favor of the HOA under these circumstances.

I don't think it's unusual for ARCs to be responsible for enforcing all covenants. Ours is.

I agree. But does your ARC have the authority to grant variances of the covenants?

In this case, the ARC has the authority to interpret and/or grant exceptions to the Use Restrictions and that is what they did.

It will not end up in a court battle ... unless the HOA removes the prior approval already given to the Owner in writing. It would be foolish for the HOA to take on a pissed off homeowner in a Court battle, who has received permission and spent money based on permission granted after they followed their own rules requesting.

I reread the OP and it does say there was a waiver of the poultry restriction. So if the ARC has the authority to grant the waiver, the chickens will remain.

I have a problem with this. The ARC controlling architectural things is one issue. I say the ability to override other Covenants such as no poultry is outside their jurisdiction. Next they will be saying they have the authority to fire/hire a PM.

JohnC46 ... Whether or not to BUILD a chicken coup and allow chickens potentially is an ACC issue to be addressed. There is a huge difference between building a chicken coup (with regards to the ACC) and hiring a PM (a BOD responsibility).

Enforcing restrictions and granting waivers to the restrictions is two completely different things.

I suggest having an attorney read the documents. If the CC&R's that are attached to the deed say the ARC can grant waivers, then it is so. But many times sentences and paragraphs can be translated into two meanings: The legal meaning and the "what I want" meaning.

Now we are getting down to some nitty gritty. The issue your HOA potentially has is the fact that CCR’s are attached to the property titles and they do not discuss this issue per your prior comments. Also, the CCR’s can be better enforced under State Laws because they are attached to the Property Titles; however, yours are silent on the issue.

However ... because the CCR’s were silent the Developer then added “Use Restrictions” which I will assume was via CCR’s vs Rules and Regulations meeting or exceeding the development rights.. The major issue here is what you have already stated:

.
“Recall that the Use Restrictions document has an Exceptions section that states "The ARC has the authority to approve, in writing, exceptions to the above rules." It appears that the ARC clearly has authority to approve exceptions.”

The ACC gave an exception approval “IN WRITING”!!! If they have any such authority and it was given in writing to an owner ... your HOA in their best interest needs to drop this issue ... or it will be a HIGH DOLLAR potential lawsuit which I would predict the HOA will LOOSE!!!